iifl-logo-icon 1

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

sidebar image

Market outlook for the next week (17-Jun to 21-Jun)

18 Jun 2024 , 09:41 AM


The week to June 14, 2024 can be described as a week that saw some sanity and stability returning to the Indian markets after almost 2 weeks of persistent volatility. With the political uncertainty over and the Modi 3.0 government in place, the action shifts to the 100-day plan and the full budget. The end of political certainty also led to the VIX falling back sharply from above 27 levels to 12.8 levels in the last one week. The week was also a week of intense data flows with the domestic inflation, industrial production, wholesale inflation and the trade deficit data being put out. In addition, the US also saw the consumer inflation data being put out, the Fed policy statement and also the quarterly update of key macros of the US economy. Here is a quick look at how key sectors performed in the week; and we look at 20 sectors in all. These are indexed descending on weekly returns.

Nifty India Defence 11.42% 7,099.41 6,371.88
Nifty Realty 5.57% 1,129.10 1,069.50
Nifty CPSE 4.63% 6,774.85 6,474.90
Nifty Consumer Durables 4.38% 37,978.95 36,384.90
Nifty Oil & Gas 3.41% 12,095.25 11,696.65
Nifty Logistics 3.23% 24,200.31 23,443.73
Nifty Infrastructure 3.15% 9,028.70 8,752.60
Nifty MNC 3.14% 30,670.65 29,737.85
Nifty Mobility 3.10% 21,316.08 20,675.83
Nifty Automobiles 2.81% 25,722.10 25,020.20
Nifty PSU Banks 2.50% 7,464.15 7,281.90
Nifty Healthcare 2.23% 12,613.00 12,337.80
Nifty Energy 1.88% 41,040.00 40,283.30
Nifty India Digital 1.23% 8,050.30 7,952.50
Nifty Financial Services 1.11% 22,411.95 22,165.80
Nifty Metals 0.80% 9,912.10 9,833.60
Nifty Banks 0.40% 50,002.00 49,803.20
Nifty Private Banks 0.28% 24,777.05 24,706.90
Nifty FMCG -1.26% 57,225.85 57,953.35
Nifty IT -1.62% 34,598.55 35,169.90

Data Source: NSE

Here are key takeaways from the tabulation of weekly sectoral returns above.

  • Let us start with the macro picture for the week to June 14, 2024. Out of the 20 key sectors, only 2 sectoral indices gave negative returns viz. IT and FMCG. The remaining 18 indices gave positive returns for the week to June 14, 2024. While markets celebrated the return of stability in political equations, it was also a week that saw rationalization of the rally, especially in sectors like IT and FMCG; which rallied over 7% last week.
  • Let us start with the top gainers for the week. Defence was the star of the week, gaining 11.42% for the week. The government game plan to expand defence exports to ₹50,000 Crore per year and to expand defence in-sourcing led to a sharp rally in defence stocks. Among other gainers; realty gained 5.57% on record offtake in the quarter, while the CPSE index continued to gain led by the defence sector. The 20 sectors gave average returns of 2.62% with 9 sectors giving more than 3% returns in the week, and 12 sectors offering more than 2% in the week.
  • With 18 out of 20 sectors giving positive returns, the Nifty should have ideally given more than 0.75% gains in the week. However, sectors with high weightage like IT and FMCG were in the negative while private banks gave tepid returns for the week.

The sector story was distinctly positive in that 18 out of 20 sectors ended higher for the week. That is almost at par with the previous week. Defence could be the sector to watch.


For the latest week to June 14, 2024, FPIs were net buyers to the tune of $1.41 Billion. Here are some of the key macros and how they impacted the markets.

  • The USDINR came under pressure in the week. That was largely on account of the weakness in the Euro due to political upheavals in France. That led to a sharp spike in the dollar index (DXY) resulting in the Indian rupee weakening. This needs to be tracked in the next week also as the dollar is likely to put further pressure on the Euro.
  • India announced the consumer inflation for May 2024 at 4.75%, 8 bps lower than the previous month. However, there are still concerns over the food inflation at 8.69% with vegetables and pulses exerting most of the pressure. The fall in inflation was triggered by the core inflation basket, which fell to 2.97%.
  • Industrial output in India was robust despite the sharply higher base in the year ago period. At 4.98%, the IIP growth was lower than the revised number for the previous month. The IIP saw pressure in the manufacturing from a higher base, although mining and electricity output were higher MOM.
  • Wholesale inflation for the month came in at a 15-month high of 2.61% for May. Pressure was seen in the food component of the primary basket, even as manufacturing inflation turned around to positive after a long gap. The only worry is that higher WPI inflation is indicative of input cost pressures on Indian companies.
  • FPI buying was robust in the week at $1.41 Billion, with FPIs ending net buyers on all the trading days. However, this appears more a reaction to the sharp fall in the VIX to 12.83 levels as well as the return of political stability in India. However, this does not obviate the concerns that FPIs have over valuation differentials.
  • Trade deficit for May 2024 came in sharply higher at $23.78 Billion on the merchandise account. This was largely on account of imports rising sharper than exports in the same period. As a result of the huge merchandise trade gap, the services surplus struggled and ended up with a net deficit of $16.50 Billion as of the close of the second month of FY25, on an overall deficit basis. Current account deficit in FY25 could be worse than expected.
  • The week also saw the Bureau of Labour Statistics (BLS) announce the consumer inflation for May 2024 at 3.3%. The consumer inflation has progressively fallen by 10 bps in the last 2 months. The concern for the Fed could be that the inflation is still a good 130 bps away from the eventual target of 2%. While Fed still relies on PCE inflation for its rate decisions, the CPI inflation does set the trend for the Fed to follow for rates.
  • The Fed policy statement in the week was about status quo. While the rates were held in the range of 5.25% to 5.50%, the Fed guided for just 1 rate cut in 2024 and possibly more aggressive rate cuts in 2025. The CME Fedwatch is also pegging up to 4-5 rate cuts in 2025, subject to the inflation macros being supportive. Fed policy underlined that higher for longer will be the theme of US monetary policy.
  • Last but not the least, the Fed also announced the projections of key macros for the next few years. Fed has guided for just one rate cut in 2024, against its previous guidance of 3 rate cuts. Instead, the Fed has promised to make rate cuts more aggressive in 2025; subject to inflation data being supportive. Fed updated the long term projections for key macros for the June quarter. The FOMC raised its inflation forecast for 2024 and 2025 and has pegged rates 50 bps higher at 5.1% by end of calendar 2024. The secular interest rates are expected to stabilize in the long run at 2.8%.

It was a week of a heavy data flows from the domestic markets and also the US markets. The underlying message was that, while the macros and the narrative were positive, the FPIs will await more confirmation in terms of the growth traction and fiscal prudence hints, before committing more funds to Indian equities.


Here are some of the key stock markets triggers that can influence the direction of the stock markets in the coming week to June 21, 2024.

  • For the week, the Nifty closed +0.75% up, Sensex closed +0.39%higher, while the Nifty Next-50 closes +3.86% higher. Market action still seems to have a penchant for smaller stocks due to its alpha capabilities. In addition, the big positive impact in the coming week will be the performance of the smaller indices. For the week, the mid-cap index grew by +3.82% while the small cap index rallied +4.81% in the week.
  • As the government puts its action plan in place, one undoubted winner is likely to be the defence sector, which gained over 11% in the week. Defence may continue to be the sector to watch out this week; both due to its ₹50,000 Crore export target and big export order flows for Indian defence stocks; apart from the domestic orders driven by in-sourcing plans of the government.
  • FPI action could hold the markets higher, although it must be said that valuations remain a concern. While FPIs infused $1.41 Billion during the week, the future trajectory of flows and oil prices cold hold the key. With rate action still uncertain, the FPI flows will be more on the back of relative valuation metrics for Indian equities in Asia.
  • Dollar index and VIX are two variables that you must track very closely. With the sharp fall in the Euro, the dollar is likely to add to its strength. The political turmoil in France weakened the Euro against the dollar; so USDINR may be under pressure. That pressure is likely to continue in the coming week also. However, the India VIX story has been more positive, falling from above 27 down to 12.8 levels.
  • The coming week will be busy in terms of corporate actions. Dividend record dates for BOI, HDFC AMC, L&T Finance, LTI, BFL, PNB, Tata Steel; and bonus/split record dates for BPCL and HPCL are expected this week. Coming week will also see 3 mainboard IPOs will raise ₹1,087 Crore this week, while six SME IPOs will also be launched in the week.
  • In an important development, the RBI MPC minutes will be published on Friday June 21, 2024. A key factor will be the arguments put forth by the dissenting voices in the MPC of Jayanth Varma and Ashima Goyal. They will hold the key to when the RBI plans to shift its monetary stance and its trajectory of rates.
  • Being a truncated week, data flows will be limited. However, one key variable this week will be the bank credit growth and deposit growth. The gap continues to be high with loans growing 19.5% and deposits growing just 13.3% leaving a huge gap. This will hold the key to the attractiveness of the banking sector.
  • Finally, we look at the key data points from the US, which include Retail sales, IIP, business inventories, API stocks, current account, housing starts, initial jobless claims, PMI. Other key data points this week include, wage growth, inflation (EU); machinery orders, BOJ minuets (Japan); unemployment, HPI (China); and BOE rate decision (UK).

The week is likely to be critical for markets to get a clear sense of direction. Let us now shift to the trajectory for Nifty and the Sensex for the coming week.


For the coming week, there are 3 things to watch out for, and which would determine the context for the future direction of the market.

  • The big story will be the VIX. It sobered from 27.3 to 12.8 in the last 2 weeks. The VIX could sober more, once the hedges are unwound. Any VIX below 12 will clearly make this a buy-on-dips market.
  • For the Nifty, 24,000 now becomes next the decisive level to breach. If Nifty breaks above 24,000 with volumes, then the next target could be higher. Shorts are not fully covered, so there is still some short position left in the markets. That is good news.
  • For the Sensex, the level of 79,000 is the next hurdle; breaching which it should then target levels of 81,000 on the upside. For that to happen, the Sensex will need the support of a positive reforms agenda from the government and a smart full budget.

The last 9 days of trading have decisively shifted the undertone to positive zone. While the mandate may not be absolute; the message is that people want aggressive growth and reforms. That is exactly what the government should be offering!

Related Tags

  • GDP
  • IIP
  • inflation
  • MonetaryPolicy
  • nifty
  • Q4FY24
  • QuarterlyResults
sidebar mobile


Read More

Invest Right News

BSE: Firing on all cylinders
10 Apr 2024|12:07 PM
Read More
Knowledge Centerplus

Logo IIFL Customer Care Number
1860-267-3000 / 7039-050-000

Logo IIFL Securities Support WhatsApp Number
+91 9892691696

Download The App Now

Knowledge Centerplus

Follow us on


2024, IIFL Securities Ltd. All Rights Reserved

  • Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
  • KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
  • No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."

www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.

  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to Rs. 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.

Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248

We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.